Ummm...can you clearly spell out the difference between jail and peer pressure for me? All solutions to social problems are, well, social in nature. It's just that jail is a more serious, systematic, long-term form of peer pressure. You're ostracizing the person over a period of months or years rather than over a period of hours or days, and you don't have to spend a lot of time making sure that everyone is "in on it."
I agree that jail has plenty of issues (certainly it does in the US, anyway) and doesn't entirely cure the problem, but neither will any other single measure you propose. Our only option is to combine techniques, preferably targeted appropriately to the seriousness of the offense. Policies and rules are one way to try to make things fair (because everyone can see the rules for themselves), rather than letting justice become arbitrary, anecdotal, incomplete, and inconsistent.